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Labor Brokers

Many large employers who rely on guestworkers attempt to avoid responsibility for unlawful practices by obtaining workers indirectly through a labor contractor.67 This use of labor brokers puts workers at greater risk of abuse and makes enforcement of their rights even more difficult than it is already.

Increasingly, the entities bringing guestworkers into the United States are not the companies that end up using the labor. This practice has devastating results for both U.S. and H-2 workers. The participation of these entities – known as labor brokers or contractors – in the H-2 program is fundamentally at odds with the purpose of the program, which is to allow employers to bring in foreign labor on a temporary basis and only when they show there is a shortage of U.S. workers for the job. Because job contractors have a permanent, year-round need for workers to supply to their employer-clients rather than a temporary need, their participation in the program erodes the built-in protections for U.S. workers. The DOL itself has concluded that a “job contractor’s ongoing need is by its very nature permanent rather than temporary.”68 The DOL is approving job contractor applications anyway.

Job contractor involvement in guestworker programs is also problematic for foreign workers. H-2 workers, who usually speak no English and have no ability to move about on their own, are completely at the mercy of these brokers for housing, food and transportation. No matter how abusive the situation, even if workers are not paid and their movements are restricted, they typically have no recourse whatsoever. Having a legal remedy against a labor contractor with no assets is no remedy at all. And it is extremely difficult for workers to get meaningful redress for violations of their rights from the ultimate employers when the employers can evade liability by shifting the blame to the contractors.

Recognizing these problems, the DOL has attempted to better regulate – though not prohibit – the involvement of job contractors in the H-2A and H-2B programs in recent years. Unfortunately, these efforts have either fallen short or been defeated by employer challenges. In 2010, the DOL enacted new regulations that require farm labor contractors to list the employers that will actually be using the labor on their application for the temporary labor.69 The regulations also require labor contractors that apply for H-2A workers to post a bond. In theory, these measures should prevent sham companies with no assets from obtaining H-2A workers and hiring out their labor. In practice, however, farmworker advocates report that labor contractors are circumventing these protections by supplying fraudulent information to the DOL, including claims that they are growers or employers, to avoid the bond requirement.

Under the current H-2B regulations, job contractors may petition for H-2B workers by demonstrating that the ultimate employer, rather than the contractor, is experiencing a temporary labor shortage. The DOL has attempted to change this practice by proposing regulations that require job contractors to establish their own temporary labor shortage and to file applications jointly with their employer-clients as a pre-condition of applying for H-2B workers. These regulations have been blocked, however, by employer-driven legal challenges.

Two lawsuits illustrate the problems with the involvement of labor brokers in the H-2 programs. In these cases, labor brokers brought in vulnerable foreign workers whom they hired out to different employers with devastating results.

Guatemalans Held Captive

According to a lawsuit filed in February 2007, 12 Guatemalan H-2B workers claim they were held captive by labor brokers and agents of Imperial Nurseries, one of the nation’s largest wholesalers of plants and shrubs.70 The men had been recruited to plant pines in North Carolina, but after they arrived in the state, they were transported by van to Connecticut and forced to work nearly 80 hours a week in nursery fields. They were housed in a filthy apartment without beds, and instead of the $7.50 an hour they were promised, they earned what amounted to $3.75 an hour before deductions for telephone service and other costs reduced their pay even further. Their passports were confiscated, they were denied emergency medical care, and they were threatened with deportation and jail if they complained. Some of the workers escaped without their passports and soon were replaced by fresh recruits from Guatemala. Eventually, one of the workers managed to explain his situation to the congregation of a local church, which helped him find legal aid.71

In a statement to The New York Times, a lawyer representing Imperial Nurseries said the allegations “relate to the conduct of an independent farm labor contractor which was responsible for compensating its employees.”72

Job contractor fraud and abuse of H-2B workers is also a problem in the hospitality industry, which increasingly relies on H-2B workers for its labor supply.73 In 2010, guestworkers in Florida filed lawsuits against several high-end hotels in Orlando for egregious wage violations. A labor contractor – Very Reliable Services, Inc. – had fraudulently obtained certification for nearly a thousand H-2B workers and then furnished them to the hotels.74 Workers were each allegedly owed wages for more than 160 hours of work they performed at the hotels after the job contractor went defunct and was unable to pay them. In response to the allegations, the hotels claimed they were not responsible for the wage violations. In a statement to the Orlando Sentinel, a spokeswoman for one of the defendants – Walt Disney World’s Swan and Dolphin Hotel – said, “The hotel is obviously sympathetic to them, but it is true they’re not employees of the hotel.”75 Other lawsuits have alleged similar schemes involving labor brokers in the hospitality industry.76

These cases are symptomatic of a flawed program that encourages the private trafficking of foreign workers with insufficient government oversight. Job contractors should be prohibited from obtaining and hiring out guestworkers. If job contractors are allowed to participate in the H-2 program, then the employers that ultimately benefit from the guestworkers’ labor should be held strictly liable for all job contractor abuses.